Morning Market Update - 26 July 2017


Pre-Open Data


Key Data for the Week

Key economic data released this week:

  • Tuesday – EUR – German Business Confidence Index rose from 115.2 in June, to an all-time high of 116.0 in July (versus 114.9 expected).
  • Tuesday – US – Consumer Confidence rose from 117.3 in June, to a 16-year high of 121.1 in July.
  • Wednesday – AUS – Consumer Price Index
  • Wednesday – UK – Preliminary GDP
  • Wednesday – US – Crude Oil Inventories
  • Wednesday – US – Federal Reserve Interest Rate Decision

Australian Market


Australian shares improved just enough to recoup Monday’s losses, with the ASX 200 index lifting by 0.68%, thanks to improvement in almost all sectors. This was despite a weak lead from Wall Street. The big picture has yet to change however, with markets remaining volatile for a number of months in the absence of a meaningful catalyst, and ahead of the August reporting season. The Australian dollar gained against most major currencies.

The Supreme Court of NSW has given the green light for a class action against failed electronics chain Dick Smith. Last year, the company closed more than 300 retail stores following lower profits, sluggish sales and losing the backing of its lenders. More than 2000 people lost their jobs when administrators were unable to find a suitable buyer.

The Australian futures market points to a 0.74% rise today, being driven by strong leads from US share markets overnight.

Overseas Market

A series of corporate earnings announcements pulled US stocks to fresh record highs overnight, while treasuries tumbled the most in a month, as the Federal Reserve began its two day monetary policy meeting.

Markets took a ‘risk-on’ tone, as generally positive earnings and economic data bolstered confidence in the strength of the global economy. The data comes as the Fed weighs robust global growth against feeble inflation and mixed US economic data. Expectations are for policy makers to keep rates on hold.

Earnings from Caterpillar and McDonald’s led to solid gains in the Dow Jones, while Alphabet’s disappointing results weighed on Technology stocks.

Banks advanced as sovereign debt yields rose, while a rally in copper supported miners. Saudi Arabia’s promise to further cut crude exports spurred the biggest rally in oil since November.

The Dow Jones closed up 100 points, or 0.5%, and the S&P 500 index finished up 7 points, or 0.3%.

European share markets finished higher, buoyed by strong business confidence data from Germany, which beat expectations.

CNIS Perspective

It could be a sign of broadening European recovery, or just desperation from yield hungry investors, but Greece has successfully raised 3 billion Euros via a government bond issuance.

At a yield of 4.625% it’s obviously an attractive source of income, particularly given S&P Global Ratings raised Greece’s credit rating outlook from stable to positive last Friday, even though it’s still sub investment grade.

The level of interest in the new bond is also a sign things have definitely improved for Greece and vindicates the bailout program Europe implemented a few years back. The bond is reported to have attracted 200 offers valued at 6.5 billion Euros, and is the first step in Greece’s bailout exit strategy which ends in August 2018.

Contact Us

Should you wish to discuss this or any other investment related matter, please contact our Investment Services Team on (02) 4927 8844.


The material contained in this publication is in the nature of general comment only, and neither purports, nor is intended to be advice on any particular matter.  Persons should not act or rely upon any information contained in or implied by this publication without seeking appropriate professional advice which relates specifically to his/her particular circumstances.  Cutcher & Neale Investment Services Pty Limited expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale Investment Services Pty Limited or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this publication. Cutcher & Neale Investment Services Pty Limited ABN 38 107 536 783 is a Corporate Authorised Representative of Cutcher & Neale Financial Services Pty Ltd ABN 22 160 682 879 AFSL 433814


Topics: Investment, CNIS, Europe, Euro, Market Update, Greece

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